Vision Fund, the multibillion-dollar investment fund formed by telecommunications and internet group SoftBank agreed yesterday to invest $450m in US-based online real estate transaction platform Compass.
Founded in 2012, Compass runs a luxury real estate brokerage that spans 30 US cities, and which operates using proprietary technology intended to simplify the property buying and selling process. It has increased the number of its agents by 500% in the past two years.
The funding, which follows the company’s entry into the Chicago property market, will support an expansion Compass expects to take it into every major US city. Compass also intends to invest in upgrading its technology.
Justin Wilson, a senior investment professional at SoftBank Vision Fund said: “Real estate is a huge asset class, but the sector has been relatively untouched by technology and remains inefficient and fragmented.
“Compass is building a differentiated, end-to-end tech platform that aggregates across diverse data streams to support agents and homebuyers through the entire process, well beyond the initial home search.
“With disruptive technology and unique data advantages, Compass is well-positioned for future growth in a sector that represents trillions in transaction volume.”
The round, which valued Compass at $2.2bn post-money according to Business Insider, boosted its total funding to $775m.
The company’s first corporate-backed round was a $40m series B in 2014, when it was still known as Urban Compass, featuring media company Advance Publications, Thrive Capital, Founders Fund, .406 Ventures and private investors Marc Benioff and Kenneth Chenault.
Institutional Venture Partners (IVP) led the company’s $60m series C round the following year, investing together with Thrive Capital, Founders Fund, .406 Ventures, Chenault and Benioff.
Compass secured $75m in a September 2016 round led by Wellington Management at a $1bn valuation that included IVP, Thrive Capital, Founders Fund and .406 Ventures, before adding $100m from investors including IVP, Wellington and Fidelity Investments at a $1.8bn valuation last month.